I'm director of content strategy at startup Exitround. I was previously a staff reporter at Forbes covering start-ups and venture capital. I'm interested in entrepreneurs who want to change the world, or have a point of view or compelling story. Email me at tgeron.news@gmail.com. I was previously a reporter for Dow Jones VentureWire where my work also appeared in the Wall Street Journal. I've also written for Red Herring, the Long Beach Press-Telegram and other outlets. In a former life I was a web developer. Follow me on Twitter tomiogeron, or Facebook , or Google+.

While BART Strikes Continues, Do Ride-Sharing Apps Complement Or Undercut Public Transit?

When the San Francisco Bay Area’s subway system BART went on strike early Monday morning, affecting 400,000 commuters, a major opportunity emerged for startups working on ride sharing, as well as for other transportation apps.

Ride sharing apps such as Lyft, Sidecar and Uber have reported a spike in ridership–for Sidecar 50% more drivers were on the road and there was a 40% increase in rides. Lyft and Sidecar also cancelled fees it takes on transactions to encourage more drivers on the roads during the strike. The strike will likely result in more people trying and eventually becoming users of these services.

At the same time, the strike also highlights the larger relationship between these ride sharing services and public transportation systems. During the strike, these apps provide an alternative for people who are stranded and have no other way to get around without BART. And in general they reduce car ownership, which improves congestion, pollution and parking problems in cities.

But on the other hand, there are critics such as New York magazine, which argued that these apps (and others) create an alternative private transportation system that only benefits the wealthy or the tech crowd. And that they undercut mass transit, causing less political pressure for improving public transit. This relationship with public transit is a key issue as these apps (and other sharing economy services) seek to grow nationwide, and regulators figure out how to address them. (Los Angeles recently issued cease-and-desist orders against Uber, Sidecar and Lyft.)

Let’s look at this in two parts. First, do ride sharing apps (and private transit options generally) encourage people not to use public transit or are they complementary? And secondly, are these apps generally helpful more to higher income people, leaving lower income people stuck with a worsening public transportation system?

On the first issue, there are obviously working and lower income people taking public transit–whether BART or San Francisco’s MUNI system or other public transit–who cannot afford a more expensive option. On the other hand there is another portion of public transit riders who can afford to take a Lyft or Sidecar at least part of the time. For many of these riders, they aren’t necessarily ditching public transit entirely to take a Lyft or Sidecar. They are taking them occasionally. The occasional ride share doesn’t seem like enough to have a negative impact on public transit.

Ride sharing apps (like carpooling) provide one more option along with public transit, ride sharing, car sharing and bicycling, says Susan Shaheen of UC Berkeley’s Transportation Sustainability Research Center. Most people use ride sharing as they do car sharing–as part of a range of options that tend to decrease car ownership, not necessarily public transit, she says.

Also, Sidecar and Lyft are often a cheaper alternative for people who otherwise would not take taxis–not an everyday replacement for public transit. People are taking Sidecar and Lyft who otherwise wouldn’t take a taxi because they can’t afford it, or because they don’t like taxi service, reliability or drivers. ”What these services are really doing is correcting several critical failures with conventional taxis,” says Jeffrey Tumlin of Nelson Nygaard Consulting Associates, which works with government agencies on transportation policy.

On the second question: are ride sharing apps just a benefit for the wealthy? Is there, as New York argues, a developing private transportation system for elites separate from the public transportation system?

First, an actual competitor to public transit are the private buses that provide $6 rides from San Francisco’s Marina to the financial district. These are more direct clones of public service for a higher price, which could undermine public ridership. There are also corporate buses that use public bus stops to shuttle Google, Facebook, Apple and Genetech employees from San Francisco to South Bay campuses that have caused resentment and, with about one-third of commuter train usage, seem to undermine commuter trains. Lumping Lyft, Sidecar and Uber with these private buses to me seems like apples and oranges. One is for private corporate employees, the other is a service for the general public–people driving their own cars offering rides to people who can choose to use them or not.

“Employer shuttles have been so controversial because they elicit a reaction around class,” says Ratna Amin, transportation policy director at San Francisco-based SPUR. ”And with ride sharing, the first people adopting it are those who have smart phones and can afford a fare and have the knowhow. Do we try to constrain that or make it more widely accesible?”

(In this post I’m focusing on ride sharing apps, and less on taxi and black car services offered by companies like Uber and Flywheel, since taxis and black cars have already existed prior to the current wave of startups and are not peer-to-peer. Although, yes, black car services are a luxury item that have become popularized through Uber as an alternative form of transportation.)

Back to ride sharing: the perception that public transit is just used by lower income people is not correct, particularly in places like San Francisco and New York, Amin says. The percentage of people to who use public transit is actually only slightly higher for poor people than for others in the Bay Area. That doesn’t mean public transit isn’t important or that lower income people can afford Lyfts every day, but it’s not as simple as saying public transit is for the poor and other apps are for the wealthy. Also carpooling, which is a predecessor to what these apps do, has long been common among lower income people, she adds. ”(Ride sharing apps) can be worth it, including to people with very low income,” adds Tumlin. “Many low income people rely on public transit could not afford a car. But they also place a high value on time.”

Sidecar’s Margaret Ryan says Sidecar riders in a survey were asked what transportation they use besides Sidecar and 53% said public transportation followed by 28% who drive. So Sidecar (and Lyft) riders are apparently not a separate group from public transportation riders, at least in the Bay Area.

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I’m afraid this is YET ANOTHER article that clearly miscommunicates the basic concept of ridesharing.

The word ridesharing has been used extensively recently to describe Lyft, Sidecar, Uber and more. These services are categorically not ridesharing! To be fair, Lyft has recently acknowledged this and does now describe itself as offering ‘peer-to-peer rides’.

Ridesharing was recently defined by the US Government (MAP-21 bill) as offering the use of seats in privately owned vehicles to other passengers ON A COST REIMBURSEMENT BASIS ONLY – http://www.govtrack.us/congress/bills/112/hr4348/text (section 1501).

The official reimbursement rate (as approved by the IRS) is $0.565 per mile. That is important because anything exceeding this amount ceases to be classified as reimbursement and becomes taxable income.

The critical fact is that once money being received becomes recognised as earnings or income, the car in question goes from being a private vehicle to a commercial one. This invalidates private motor insurance, meaning that neither drivers nor passengers are covered. Most importantly, THIS IS ILLEGAL. No wonder the companies mentioned above have been receiving cease and desist notices!

In addition, this piece advises that services such as Lyft and Sidecar are “a cheaper alternative” to taxis. Has anyone at Forbes actually used Lyft of Sidecar recently?!

For full disclosure purposes, I work for Avego. We are most definitely a real-time ridesharing company and have been working around the clock this week to come to the aid of Bay Area commuters affected by the BART strike. It is highly disappointing that a prominent media source such as Forbes has posted an article about ‘ridesharing’ and has not only failed to mention Avego, but has concentrated solely on services that are not even ridesharing!

Finally, for the record, Avego embraces and applauds all forms of innovation in transport technology – but not at the expense of legality or safety.

The best overall solution (and one I’ve researched) is likely to be an integrated system of public transit, private transit, ridesharing, and park/ride locations, though the information and integration problems have been problematic so far, not to mention the fare/payment problems to keep it running. Improvements in mobile computing should make it more feasible in the years to come, provided society can be made to care enough to put the effort to set this up.

Public transit systems operate at a loss and have peak demand issues that are very difficult to serve efficiently- not to mention the “last mile” problems when trying to serve the suburbs.

Ridesharing not only complements public transportation but it promotes it. The more options there are to go from A to B, the less reasons to own a car. Ridesharing and public transit meet different needs and both are bound to grow if they offer good service.

Arguably public transit offers a backup to ridesharing- though there is an interesting history of “Jitneys” to throw into the mix, whether as feeder service into a transit backbone, or a full service in itself.

Tomio– Great article. Most importantly the BART strike demonstrates that mobility for all requires an Ecosystem of options. The answer is RideScout– We built an app that combines easy to sort options that include public transit, commercial transportation, AND rideshare in one App. We are in Beta right now in Austin but plan to launch big in Washington DC this fall starting with Public transit, Car2Go, SideCar, Capital Bike Share, taxi and rideshare all in one App. Think of us as the Kayak of Ground Transportation. We’ll add cities and carriers as we grow. www.ridescoutapp.com